Unusual gains reported as companies suspend trading on BSE launch

Ten companies had to suspend trading twice in the first 30 minutes of Beijing Stock Exchange's debut on Monday, as they have seeing their prices up by more than 60 percent.

The daily price fluctuation of BSE-listed companies is set at 30 percent and no limit will be set on the first trading day. But trading will be suspended for 10 minutes if the company's price is up by 30 percent from the opening quotation and paused for another 10 minutes if the price is by up 60 percent in total.

Among the first batch of 81 companies listed on the new bourse, Henan Tongxin Chuandong, a leading Chinese auto parts provider, instantly saw its price soared by nearly 400 percent in the first few trading minutes. Nearly 60 companies reported gains in the first 10 trading minutes.

Individual investors holding at least 500,000 yuan ($78,352) worth of assets in their personal securities accounts will be allowed to trade on the exchange. The number of qualified investors will exceed 4 million, as the BSE estimated.

The BSE, which is seen nurturing more technologically advanced small and medium-sized enterprises, has been initiated by the central regulators in early September. It is initially built upon the NEEQ Select, the highest tier of the eight-year-old National Equities Exchange and Quotations system. Companies trading on the NEEQ Innovation -- the NEEQ's second-highest tier -- can apply to be listed on the BSE as long as they remain listed on the NEEQ Innovation for 12 consecutive months.

Eugene Qian, chairman of UBS Securities Co Ltd, said that the launch of the BSE is an important step forward to build a multi-level capital market in China. The threshold setting at 200 million yuan of market cap for BSE-listed companies and no stress laid on net profit will better serve innovative SMEs.

High hopes have been given to the BSE to differentiate itself from the other boards in China and grow into the Chinese version of Nasdaq where technology startups can scale up, he said.